t/f part 2

Which of the following statements is/are true?

1. A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the current state of affairs.

2. The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.

• 1 only

• 2 only

• Both 1 and 2

• Neither 1 or 2

Which of the following statements is/are true?

1. A supplier of goods on credit is interested only in the statement of financial position, ie an indication of the current state of affairs.

2. The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.

• 1 only

• 2 only

• Both 1 and 2

• Neither 1 or 2

Which of the following statements is/are true?

1. The directors of a company are ultimately responsible for the preparation of financial statements, even if the majority of the work on them is performed by the finance department.

2. If financial statements are audited, then the responsibility for those financial statements instead falls on the auditors instead of the directors.

3. There are generally no laws surrounding the duties of directors in managing the affairs of a company.

• 1 only

• 1 and 2 only

• 1, 2 and 3

• 1 and 3 only

Which of the following are TRUE of partnerships?

1. The partners’ individual exposure to debt is limited.

2. Financial statements for the partnership by law must be produced and made public.

3. A partnership is not a separate legal entity from the partners themselves.

• 1 and 2 only

• 2 only

• 3 only

• 1 and 3 only

Which of the following statements is/are true?

1. Directors of companies have a duty of care to show reasonable competence in their management of the affairs of a company.

2. Directors of companies must act honestly in what they consider to be the best interest of the company.

3. A Director’s main aim should be to create wealth for the shareholders of the company.

• 1 and 2 only

• 2 only

• 1, 2 and 3

• 1 and 3 only

Which of the following statements is/are true?

1. The IFRS Interpretations Committee is a forum for the IASB to consult with the outside world. 2. The IFRS Foundation produces IFRSs. The IFRS Foundation is overseen by the IASB.

3. One of the objectives of the IFRS Foundation is to bring about convergence of national accounting standards and IFRSs.

• 1 and 3 only

• 2 only

• 2 and 3 only

• 3 only

Are the following statements about debit entries true or false?

1. A debit entry in the cash book will increase an overdraft in the accounts.

2. A debit entry in the cash book will increase a bank balance in the accounts.

• Both true

• Both false

• 1 true and 2 false

• 1 false and 2 true

Which of the following statements is/are TRUE or FALSE?

1. Cash purchases are recorded in the purchases day book.

2. The sales day books is used to keep a list of invoices received from suppliers.

• Both statements are TRUE

• Both statements are FALSE

• Statement 1 is TRUE and statement 2 is FALSE

• Statement 1 is FALSE and statement 2 is TRUE

According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true?

1. Development costs recognised as an asset must be amortised over a period not exceeding five years.

2. Research expenditure, other than capital expenditure on research facilities, should be recognised as an expense as incurred.

3. In deciding whether development expenditure qualifies to be recognised as an asset, it is necessary to consider whether there will be adequate finance available to complete the project.

4. Development projects must be reviewed at each reporting date, and expenditure on any project no longer qualifying for capitalisation must be amortised through the statement of profit or loss and other comprehensive income over a period not exceeding five years

• 1 and 4

• 2 and 4

• 2 and 3

• 1 and 3

According to IAS 38 Intangible assets, which of the following statements is/are correct?

1. Capitalised development expenditure must be amortised over a period not exceeding five years.

2. If all the conditions specified in IAS 38 are met, development expenditure may be capitalised if the directors decide to do so.

3. Capitalised development costs are shown in the statement of financial position under the heading of non-current assets.

4. Amortisation of capitalised development expenditure will appear as an item in a company's statement of changes in equity.

• 3 only

• 2 and 3

• 1 and 4

• 1 and 3